WPP is in preliminary talks, as first reported by Sky News, to sell a minority stake in its China business to a consortium of Alibaba, China Media Capital, and Tencent.
Campaign China understands that the topic came out during a visit to China by Roberto Quarta, WPP’s chairman, and Andrew Scott, co-COO, earlier in July. However, the discussions are understood to be at a very early stage.
Sources estimate the stake to be roughly 20% of WPP China, valued at between $2 billion and $2.5 billion, which would reportedly be spun off into a new holding company.
WPP has set up various partnerships in the past, with Tencent to establish a social marketing lab and with Alibaba to integrate multiple audience data sources, but this deal, if passed, would position the two Chinese tech giants as equal shareholders instead of rivals fighting for adspend. CMC's founding chairman Ruigang Li has been a non-executive director of WPP since November 2012.
A WPP spokesperson declined to comment.
A version of this story was first reported by Campaign Asia-Pacific